The White House fraud task force, through the Department of Housing and Urban Development, has cut off funding to the Los Angeles Homeless Services Authority (LAHSA) effective immediately pending an investigation by HUD's inspector general, accusing the agency of "obvious fraud" and "wanton mismanagement."
Bill Essayli, First Assistant U.S. Attorney for the Central District of California, is also investigating the agency's finances through the Homelessness Fraud and Corruption Task Force he formed in April 2025 to "investigate fraud, waste, abuse, and corruption involving funds allocated toward the eradication of homelessness" in his jurisdiction.
In a 13-page letter sent Thursday morning announcing the action, the agency, which has received more than $1 billion in federal funds since 2021, was told:
"HUD has evidence that LAHSA's repeated false statements and its irresponsible actions and failures, including its lack of financial management, internal controls, and safeguards against conflicts of interest, pose a threat to HUD, the public, and those living on the streets of Los Angeles."
Financial statements sent by LAHSA to external auditors as part of its required annual single audit contained "'significant' inaccurate amounts that needed to be adjusted late in the audit process," leading the agency to miss its deadline to file by several weeks. According to auditors, those inaccuracies stemmed from a "significant deficiency” in LAHSA’s “internal controls.”
LAHSA, a joint powers agency of the County of Los Angeles and the City of Los Angeles, has a budget of $829 million for the 2025-26 fiscal year, with $379 million coming from LA County and $290 million coming from the City. Due to ongoing financial management issues revealed in prior audits, LA County has withdrawn future funding for the agency, establishing its own Department of Homeless Services and Housing (which will undoubtedly also be filled with fraud).
Since 2020 LAHSA has been embroiled in a federal lawsuit brought by the LA Alliance for Human Rights alleging that the city's homeless conditions violated of state and federal law and asking that the defendants (LAHSA and the City and County) be ordered to provide shelters and "wraparound services" for the homeless. A 2024 audit ordered by Judge David O. Carter essentially found that basic financial accountability and compliance procedures were completely absent, conflict-of-interest policies were totally ignored, and because of siloing there was duplication of spending and effort.
DIVE DEEPER: Feds Investigating Los Angeles Homeless Industrial Complex Spending - Here's How We Got Here
One of those "conflicts of interest" issues involves a friend of Los Angeles Mayor Karen Bass. The audit found that $1.7 million was paid out on a $2.1 million contract to Upward Bound House, where the husband of LAHSA's now-former Chief Executive, Va Lecia Adams Kellum, is a top executive. Adams Kellum signed the contract and two amendments herself and was listed as the LAHSA administrator for the contract, in violation of ethics rules.
Prior to starting as CEO, Adams Kellum herself received a $60,000 no-bid contract from LAHSA to advise Bass on homelessness issues and Bass' Inside Safe initiative for six weeks (yes, you read that correctly, six weeks) in early 2023. She was paid a base salary of $430,000 a year as CEO of LAHSA, and resigned in April 2025.
Auditors also found that "LAHSA did not contemporaneously verify that the service provider invoices reflected actual services provided at the given location before approving payment" and that there was a "high level of noncompliance" in the sampling of service provider invoices reviewed.
That's probably why Alexander Soofer, who was arrested earlier this year for pocketing $10 million in funds his "charity," Abundant Blessings, received from LAHSA to feed the homeless, was able to get away with it. Soofer used the money to fund a lavish lifestyle, including a "down payment on his $7 million Westwood home, millions of dollars of upgrades to that home, private schooling for his children, lavish spending in Las Vegas, private jet travel, and stays at luxury resorts across the United States – from Hawaii to Florida. Soofer also appeared to use $475,000 to purchase a vacation property in Greece, sending this money to a Greek property developer."
READ MORE: LA Man Charged With Embezzling Millions Meant to Provide Meals for Homeless, Gave Them Ramen Instead
Since 2021, LAHSA received $1 billion while homelessness skyrocketed and fraud ran rampant.
— Scott Turner (@SecretaryTurner) June 11, 2026
Our message to the homelessness industrial complex: If you are doing something fraudulent, you are on notice. pic.twitter.com/agjJC4DexB
Stopping the money flow to these ineffective and corrupt NGOs is the only way to restore some type of order in Los Angeles and other large blue cities across the country; this is a welcome first step.
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